The Fire Next Time
Now, Mr. McConnell surely isn’t sincere; while pretending to oppose bank bailouts, he’s actually doing the bankers’ bidding. But before I get to that, let’s talk about why he’s wrong on substance.McConnell continues to be an embarrassment to the state of Kentucky and the U.S. Senate. He's going for a twofer - lying about financial reform and fighting for the kind of wild irresponsible behavior that lead to the Great Recession. As of this writing every Republican in the Senate has signed on to a filibuster threat - to keep financial reform to even coming up from debate. McConnell and his herd of Republican sheep know they cannot win on the merits so they're using parlimentary tricks to kill legislation aimed at protecting working Americans.
In his speech, Mr. McConnell seemed to be saying that in the future, the U.S. government should just let banks fail. We “must put an end to taxpayer funded bailouts for Wall Street banks.” What’s wrong with that?
The answer is that letting banks fail — as opposed to seizing and restructuring them — is a bad idea for the same reason that it’s a bad idea to stand aside while an urban office building burns. In both cases, the damage has a tendency to spread. In 1930, U.S. officials stood aside as banks failed; the result was the Great Depression. In 2008, they stood aside as Lehman Brothers imploded; within days, credit markets had frozen and we were staring into the economic abyss.
So it’s crucial to avoid disorderly bank collapses, just as it’s crucial to avoid out-of-control urban fires.
Since the 1930s, we’ve had a standard procedure for dealing with failing banks: the Federal Deposit Insurance Corporation has the right to seize a bank that’s on the brink, protecting its depositors while cleaning out the stockholders. In the crisis of 2008, however, it became clear that this procedure wasn’t up to dealing with complex modern financial institutions like Lehman or Citigroup.
So proposed reform legislation gives regulators “resolution authority,” which basically means giving them the ability to deal with the likes of Lehman in much the same way that the F.D.I.C. deals with conventional banks. Who could object to that?
Well, Mr. McConnell is trying. His talking points come straight out of a memo Frank Luntz, the Republican political consultant, circulated in January on how to oppose financial reform. “Frankly,” wrote Mr. Luntz, “the single best way to kill any legislation is to link it to the Big Bank Bailout.” And Mr. McConnell is following those stage directions.
It’s a truly shameless performance: Mr. McConnell is pretending to stand up for taxpayers against Wall Street while in fact doing just the opposite. In recent weeks, he and other Republican leaders have held meetings with Wall Street executives and lobbyists, in which the G.O.P. and the financial industry have sought to coordinate their political strategy.
And let me assure you, Wall Street isn’t lobbying to prevent future bank bailouts. If anything, it’s trying to ensure that there will be more bailouts. By depriving regulators of the tools they need to seize failing financial firms, financial lobbyists increase the chances that when the next crisis strikes, taxpayers will end up paying a ransom to stockholders and executives as the price of avoiding collapse.
Even more important, however, the financial industry wants to avoid serious regulation; it wants to be left free to engage in the same behavior that created this crisis. It’s worth remembering that between the 1930s and the 1980s, there weren’t any really big financial bailouts, because strong regulation kept most banks out of trouble. It was only with Reagan-era deregulation that big bank disasters re-emerged. In fact, relative to the size of the economy, the taxpayer costs of the savings and loan disaster, which unfolded in the Reagan years, were much higher than anything likely to happen under President Obama.
To understand what’s really at stake right now, watch the looming fight over derivatives, the complex financial instruments Warren Buffett famously described as “financial weapons of mass destruction.” The Obama administration wants tighter regulation of derivatives, while Republicans are opposed. And that tells you everything you need to know.
So don’t be fooled. When Mitch McConnell denounces big bank bailouts, what he’s really trying to do is give the bankers everything they want.
The drug addict draft dodging decadent king of Republican pundits has been caught lying again - Rush Lies Again: ‘There Were Union Workers’ At Non-Union Mine Explosion. Limbaugh and his mindless America hating followers decided long along that making Limbaugh rich from blowing hot air is more important than what is best for America.
Conservatives hate groups and far right-wing news media have a vial campaign underway filled with spurious lies about President Obama - About those 25 tax increases...
Camp's document does list 25 provisions from 5 pieces of legislation that taken all together, raise $670 billion over ten years. Most of these provisions won't go into effect for years and won't directly affect most of us. As the document itself notes, it is a list of "gross tax increases," not net tax increases, so it's really only a useful source of information for people like, well, Republican politicians and their media tools. It appears to count as a "tax increase" any provision that raises revenue relative to what would have otherwise occurred. And since it doesn't provide any information about provisions that reduce revenue -- such as the small business tax credits and exchange subsidies in the health care reform law or the tax cuts from the stimulus package -- it doesn't tell us much about how Obama is changing the country's tax bill overall. Nor does it attempt to weigh the merits of the revenue-raising provisions, which is something you'd think those concerned about the budget deficit would want to do.There are more examples at the link. Anyone notice a trend here. Republicans cannot win a debate on the facts so use tricks to stop debate. They cannot undo the fact that Democrats cut taxes for most Americans so they lie. Whatever happened to those conservative "values"? Turns out that was just another lie.
Notably, several of the provisions listed would not be characterized as "tax increases" by most people. For example:
Eliminating the deduction for expense allocable to Medicare Part D subsidy. Camp lists this provision in the health care reform law as a "tax increase" that will raise revenue by $4.5 billion over ten years. The provision eliminates a loophole that allowed companies to take a tax deduction on a tax-free government subsidy. So not only does this not impose a new tax on businesses, it doesn't touch the chunk of taxpayer cash we give tax-free to companies for providing Medicare Part D benefits for their retirees. All it does is say that businesses can't then count that subsidy as an expense and deduct it from their taxable income. Funny I didn't see any signs demanding Congress reinstate corporate "double-dipping" at the tea party rallies.
Making "black liquor" ineligible for cellulosic biofuel producer credit. Camp has this down as a $23.6 billion tax increase over ten years. "Black liquor" is a wood byproduct burned by paper companies to generate electricity. In recent years, papermakers realized that they could get a hold of some taxpayer handouts by mixing diesel fuel into the black liquor, rendering themselves eligible for an alternative fuels tax credit. This provision ensures that papermakers using black liquor do not get tax breaks that were never meant for them. I can almost feel my freedom shrinking.
Codifying economic substance doctrine and imposing penalties for underpayments. This provision raises $4.5 billion over ten years. According to the Tax Policy Center, codifying the "economic substance" doctrine is part of an effort "to address the problem of abusive tax shelters." The measure aims to make it easier for courts to judge when a company is involved in a bogus transaction designed to reduce their tax bill. I think most would dispute the claim that encouraging companies to pay their fair share of taxes amounts to a "tax increase."
